The US economy is showing resilience, especially in the services sector. The US consumer sentiment is optimistic, being supported by wage gains and falling inflation expectations. The core PCE is at 4.6 percent which is above the 2 percent FED target. Canada's inflation is falling faster than the US inflation currently at 3.2 percent which is relatively close to BOC 2 percent target.
Interest rate differential
The FED is expected to hike rates in September and November each by 25 basis points pushing the fed fund rates to the range of 5.5-5.75 percent while Canada's rates are expected to have peaked. Canada's inflation rates are close to target meaning BOC could be the first to cut rates.
The interest rate differential between US and Canadian bond yields has been growing in favor of the dollar it the large part of the week while USDCAD has been falling. That divergence will be reflected in the currency.
Positioning and Sentiment
Leveraged funds bets on CAD is slightly bullish which can easily flip to bearish wagers as CAD weakens further.
Price action
Fundamentals tell us what will happen in the future then price tells us when that will happen. Any price structure that supports bullish direction of the currency close to 1.300 might present a good buy opportunity.
면책 조항: 본 게시글에 표현된 견해는 전적으로 작성자의 견해이며 Followme의 공식 입장을 대변하지 않습니다. Followme는 제공된 정보의 정확성, 완전성 또는 신뢰성에 대해 책임을 지지 않으며, 서면으로 명시적으로 언급되지 않는 한 해당 내용을 기반으로 취해진 어떠한 조치에 대해서도 책임을 지지 않습니다.
